A Moral Point Of View

1280 WordsMar 30, 20176 Pages
From a moral point of view, I agree with Glassbeek (2002) that “whereas corporations are the primary, permanent, and very concrete tools that wealth owners use to satisfy their never-ending drive to accumulate more riches and power at the expense of the rest of us, the majority.” (p. 7). As it was argued in this paper, shareholder primacy acts for the benefits of shareholders regardless of the future costs and effects on societies. Long-term prospects of corporations, employment conditions of the general labour are ignored for the sake of wealth accumulation of the elite. Elite owns most of the shares of corporations which means that they are the only ones who benefit from concentration on the stock market performance: “The top half of 1…show more content…
19). Hungry and greedy individuals who act upon short-term gains through the use of shareholder primacy are supposed to provide the greatest amount of good for the greatest amount of people, but how can they be expected to do so if they attain their interests through the use of downsizing that damages long-term prospects of corporations and society 's welfare? Especially given the fact that the inefficiencies of conglomerates formed in 1960s was the doing of these same individuals. According to Ho (2009) “...breaking up the conglomerates that Wall Street had helped assemble in the first place created a whole new source of profits.” (p. 137). Wall Street institutions made profits by first creating the "inefficiencies" and then solving these same "inefficiencies, while the general public has to suffer the consequences. From the moral perspective, overall good will not be achieved as long as greedy individuals and institutions are responsible for providing social welfare and as long as shareholder primacy will be the dominant model of corporate governances. Any model of corporate governance will have benefits and costs, but in the case of shareholder primacy the costs outweigh the benefits. To address the costs of shareholder primacy, there needs to be a shift of concentration of managers’ efforts from performance of the company on a stock market towards the attainment of real value. Increase in the stock price of a company is
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